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THE peso rose while local stock fell a day after the
Bangko Sentral ng Pilipinas (BSP) raised its key interest rates to
temper rising inflation.
At the Philippine Dealing System
the local currency recovered to a three-week high Friday after the
BSP’s 50 basis points increase in its overnight borrowing and
lending rates to 5.75 percent and 7.75 percent, respectively.
The peso closed at 44.455 to the
dollar, from Thursday’s finish at 45.03. Trading volume reached
$1.166 billion from $804 million the day before.
“Peso recovery benefited from
some easing in global oil prices as well as the stronger monetary
action by the BSP. Report of higher remittances also helped. The
dollar had also been overbought,” BSP Governor Amando Tetangco Jr.
said in a text message.
Crude oil prices fell to $130 a
barrel from $135 a barrel on Thursday.
Bank traders said a plunge in the
price of oil by $5 on worries over US demand and easing political
tensions between Iran and the US, as well as the hawkish tone of the
BSP have been positive on the peso.
Metropolitan Bank and Trust Co.
said caution is advised given the lingering global credit concerns,
weakening Philippine economic data and the dollar gaining strength
across the board.
The central bank’s decision to
raise its policy rates had been anticipated by the market, although
some industry players were forecasting only a 25-basis-point
increase, after such an adjustment last month. Analysts earlier said
the threats of second-round effects to inflation would force the BSP
to maintain a tight monetary policy this year.
In its assessment of price
conditions, the BSP noted that concurrent and interrelated shocks to
the economy—such as persistent surge in oil prices and spikes in
commodity prices—have contributed to elevated inflation readings.
At the Philippine Stock Exchange,
share prices closed 0.2 percent lower Friday as jitters after an
interest rate hike offset gains due to a plunge in crude oil prices,
dealers said.
The composite index shed 4.10
points to 2,389.52. The all-share index gained 0.95 points to
1,516.83.
Forty issues advanced, 41
declined and 50 were unchanged. Turnover rose to P2.0 billion from
P1.782 billion on Thursday.
“The stock market traded on
three main developments—the fall in oil futures, the rise on Wall
Street and the central bank’s rate increase,” Ron Rodrigo of DBP
Daiwa Securities told Dow Jones Newswires.
The Philippine central bank
raised its key interest rates by half a percentage point on Thursday
to battle the threat to economic growth from high inflation.
Oil prices were slightly higher
in Asia on Friday after three days of heavy falls that pulled prices
down almost $16 on worries over economic growth and slowing demand.
US share prices roared higher for
a second straight day Thursday on the oil price drop.
Top-traded Ayala Land Inc. was
off 3.4 percent to P8.50, while Metropolitan Bank and Trust Co. was
down 3.2 percent to P30.50.
The Bank of the Philippine
Islands shed 2.6 percent to P38 as high interest rates were expected
to hurt loan demand and property sales.
Philippine Long Distance
Telephone Co. ended up 0.4 percent at P2,405 after a 0.9-percent
rise in its American Depositary Receipts on Wall Street on Thursday.
San Miguel Corp.’s A and B
shares were both unchanged at P40 and P41, respectively.
--Chino S. Leyco and AFP
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